One Thing that's Not as Bad as You May Have Thought

You know how it has become increasingly common for mainstream retail stores to have a round-up donation for some nonprofit cause or other? 

Maybe you've heard or read something (or seen a video) saying that those big store chains are taking a tax deduction based on the amounts donated by their customers. I've certainly heard that, and thought it made sense.

Well, it turns out that is not true. 

Michelle Singletary, the long-time personal finance columnist for the Washington Post, whom I consider to be a trustworthy source despite her employer, had a recent piece about this topic and declares emphatically that it violates federal law. She quotes Renu Zaretsky from the Urban-Brookings Tax Policy Center as her source. 

So if you feel like donating that way, go ahead.  

From Singletary's article I also learned that, starting in 2026, people who use the standard deduction when filing their taxes will once again be able to claim some charitable contributions "above the line." The amounts they can deduct are $1,000 for people who file single and $2,000 for people who file jointly. (Since the standard deduction was raised significantly in the 2018 tax year, there has not been a charitable deduction that made sense for many people with modest incomes.)  

Receipts for the contributions are needed in case of audit, of course. For donations at the register, if those amounts seem important to note, I would think either the cash register receipts or keeping a list (similar to a mileage diary) would be all that's needed.